China Releases Guidelines for RMB Qualified Foreign Institutional Investors Program
May 7 – The People’s Bank of China released the “Circular on Implementing the Pilot Measures for Securities Investment in the Mainland by RMB Qualified Foreign Institutional Investors (RQFII) (hereinafter referred to as ‘Circular’)” on May 2, 2013, which offers guidelines on the implementation of the RQFII program. Detailed information can be found below.
The Circular requires a RQFII to open a basic deposit account, as well as special deposit accounts for transactions in domestic stock exchanges and the inter-bank market through a QFII custodian. For RQFII investors who are interested in the trading of stock futures, they should also open a special deposit account with a depository bank.
The Circular further states that, when setting up the above-mentioned accounts, RQFIIs must separate their proprietary funds from the funds under management for their clients, and create a separate special account for each open-ended fund.
Moreover, RQFIIs shall not transfer funds between the special deposit accounts and other accounts, or between the proprietary fund accounts, the clients’ fund accounts and the open-ended fund accounts. Besides, transfer of funds is prohibited between different open-ended fund accounts and cash withdrawal from special deposit accounts is not allowed.
For RQFII investors wanting to remit their investment revenues from their accounts (excluding open-ended fund accounts), they should provide related tax statements and an audited report issued by a domestic accounting firm.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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